Dividends are a slightly lagging indicator for the U.S. economy, where they are typically about 1-3 months behind the events that drive the U.S. economy. For our purposes, following the announcement of dividend cuts is useful as a near real-time measure of the relative health of the U.S. economy.

So, one month into 2017-Q4, we have to report that the pace of dividend cuts in 2017-Q4 is so far higher at this point of time than at the same point in every other quarter of 2017.

Our sample for October 2017 includes some 25 firms, of which, 15 are in the oil and gas industry, 6 are in the finance or are heavily invested in the real estate industry, and the remaining 4 firms are equally split between the mining and manufacturing sectors. The largest firm by market capitalization was Mattel (NYSE: MAT), which suspended its dividend during the last week of October 2017, after just having slashed it one quarter earlier in August 2017.

As you might guess from the large concentration of firms in the oil and gas industry, most of the distress in the U.S. economy has been concentrated in that sector, which is largely attributable to the level of crude oil prices during the third quarter of 2017, which rebounded after falling in the previous quarter, but still remained relatively low.

For this industry, the good news is that crude oil prices have been rising since the end of August 2017, which points to higher profits and fewer dividend cuts in upcoming quarters.

Meanwhile, the source of distress in the financial industry, and especially its real estate investment trust component, can be attributed to the Fed’s ongoing series of short term interest rate hikes, the latest of which was still being absorbed during the third quarter of 2017.

The pace of dividend cuts in 2017-Q4 is also ahead of the same period in the previous year. The following chart compares the pace of dividend cuts in 2016-Q4 with the cuts-to-date announced in 2017-Q4.

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